|Housing Shock Stalls S Korean Economy|
|by Tom McGregor||Wed, Jul 4, 2012, 07:44 PM|
The South Korean economy is growing at a fast rate since its corporations have expanded globally, despite the eurozone debt and fiscal crisis. Korean companies are enjoying remarkable growth with construction in the Middle East and automobile manufacturing in the U.S.
Asia Times reports that, “amidst all this activity, one might expect the principal drivers of this economy, the people themselves, to be at least enjoying financial stability. Yet a faltering housing market is spreading widespread damage among domestic budgets and small non-exporting companies. The government’s nationwide housing index shows price declines for four of the six months to the end of April.”
Koreans believe that owning a home is a cultural necessity. Property constitutes a physical manifestation of an individual’s wealth and tied to the notion of success. In 2007, the housing market appeared to be on a continual rise. Prices had been rising and many took financial risks to purchase homes.
According to the Asia Times, “naturally, last year’s downward fall was devastated for many people. Devalued homes no longer served as sufficient collateral for loans and the debt that many homeowners had taken on became and overwhelming burden.”
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